-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mh7HUQbbduE+PFlfp4Df9fk2I0EfpqJ5HKhWiq4xRBWlk5XXQHcFV09SY2z6B6wI wAs0VIlIqwog3NZPDHBGuw== 0001072613-01-500809.txt : 20010815 0001072613-01-500809.hdr.sgml : 20010815 ACCESSION NUMBER: 0001072613-01-500809 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPIRE CORP CENTRAL INDEX KEY: 0000731657 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 042457335 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-12742 FILM NUMBER: 1708953 BUSINESS ADDRESS: STREET 1: ONE PATRIOTS PARK CITY: BEDFORD STATE: MA ZIP: 01730-2396 BUSINESS PHONE: 6172756000 MAIL ADDRESS: STREET 2: ONE PATRIOTS PARK CITY: BEDFORD STATE: MA ZIP: 01730-2396 10QSB 1 form10q_10808.txt SPIRE CORPORATION FORM 10-QSB JUNE 30, 2001 2001 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (MARK ONE) |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2001. or |_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____________ to _____________ Commission file number: 0-12742 SPIRE CORPORATION - -------------------------------------------------------------------------------- (NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) Massachusetts 04-2457335 - -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER) One Patriots Park, Bedford, Massachusetts 01730-2396 781-275-6000 - -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE) (ISSUER'S TELEPHONE NUMBER, OFFICES) INCLUDING AREA CODE) Securities registered under Section 12(b) of the Exchange Act: Title of Each Class Name of Each Exchange on Which Registered - -------------------------------------------------------------------------------- Not applicable Not applicable Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.01 par value, Nasdaq ----------------------------------------- Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. There were 6,730,410 outstanding shares of the issuer's only class of common equity, Common Stock, $.01 par value, on July 31, 2001. Transitional Small Business Disclosure Format (Check One): Yes |_| No |X| ================================================================================ SPIRE CORPORATION INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements. Condensed Consolidated Balance Sheets at 3 June 30, 2001 (unaudited) and December 31, 2000 Condensed Consolidated Statements of Operations 4 For the Three Months Ended June 30, 2001 and 2000 and For the Six Months Ended June 30, 2001 and 2000 (unaudited) Condensed Consolidated Statements of Cash Flows 5 For the Six Months Ended June 30, 2001 and 2000 (unaudited) Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings. 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K. 11 SIGNATURES 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SPIRE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, 2001 2000 ----------- ----------- (UNAUDITED) ASSETS Current assets - -------------- Cash and cash equivalents $ 7,432,161 $ 7,463,382 Accounts receivable, trade: Amounts billed 2,314,763 2,210,901 Retainage 45,457 45,457 Unbilled costs 389,264 977,800 ----------- ----------- 2,749,484 3,234,158 Less allowance for doubtful accounts 108,000 108,000 ----------- ----------- Net accounts receivable 2,641,484 3,126,158 ----------- ----------- Inventories 3,409,226 2,958,840 Deferred income taxes 60,000 260,000 Prepaid expenses and other current assets 260,457 326,725 ----------- ----------- Total current assets 13,803,328 14,135,105 ----------- ----------- Property and equipment 14,992,093 15,084,479 Less accumulated depreciation and amortization 12,959,367 12,913,912 ----------- ----------- Net property and equipment 2,032,726 2,170,567 ----------- ----------- Patents (less accumulated amortization, $486,756 in 2001 and $478,287 in 2000) 191,087 131,128 Other assets 4,167 5,567 ----------- ----------- 195,254 136,695 ----------- ----------- $16,031,308 $16,442,367 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities - ------------------- Accounts payable $ 1,056,995 $ 1,230,607 Accrued liabilities 1,627,055 1,229,432 Deferred revenues 1,500,000 530,227 Notes payable 875,000 550,000 Advances on contracts in progress 844,429 1,570,683 ----------- ----------- Total current liabilities 5,903,479 5,110,949 ----------- ----------- Stockholders' equity - -------------------- Common stock, $.01 par value; shares authorized 20,000,000; issued 6,730,410 shares in 2001 and 6,681,824 shares in 2000 67,304 66,818 Additional paid-in capital 8,973,561 8,877,019 Retained earnings 1,086,964 2,387,581 ----------- ----------- Total stockholders' equity 10,127,829 11,331,418 ----------- ----------- $16,031,308 $16,442,367 =========== ===========
See accompanying notes to condensed consolidated financial statements. 3 SPIRE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, ---------------------------- ---------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Net sales and revenues Contract research, service and license revenues $ 1,274,287 $ 1,935,000 $ 2,525,488 $ 4,311,954 Sales of goods 1,690,012 1,224,114 3,658,681 3,378,780 ----------- ----------- ----------- ----------- Total sales and revenues 2,964,299 3,159,114 6,184,169 7,690,734 ----------- ----------- ----------- ----------- Costs and expenses Cost of contract research, services and licenses 1,046,779 1,761,049 1,937,438 3,292,670 Cost of goods sold 1,401,256 769,374 3,019,660 2,083,294 Selling, general and administrative expenses 1,353,385 1,218,216 2,747,637 2,556,576 ----------- ----------- ----------- ----------- Total costs and expenses 3,801,420 3,748,639 7,704,735 7,932,540 ----------- ----------- ----------- ----------- Loss from operations (837,121) (589,525) (1,520,566) (241,806) Interest income, net 59,997 117,511 139,951 242,604 ----------- ----------- ----------- ----------- Earnings (loss) before income taxes (777,124) (472,014) (1,380,615) 798 Income tax benefit (79,998) (205,600) (79,998) -- ----------- ----------- ----------- ----------- Net earnings (loss) $ (697,126) $ (266,414) $(1,300,617) $ 798 =========== =========== =========== =========== Earnings (loss) per share of common stock - basic $ (0.10) $ (0.04) $ (0.19) $ 0.00 =========== =========== =========== =========== Earnings (loss) per share of common stock - diluted $ (0.10) $ (0.04) $ (0.19) $ 0.00 =========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding - basic 6,707,763 6,627,680 6,696,377 6,606,422 =========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding - diluted 6,707,763 6,627,680 6,696,377 6,767,530 =========== =========== =========== ===========
See accompanying notes to condensed consolidated financial statements. 4 SPIRE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, ------------------------------ 2001 2000 ------------ ------------ Cash flows from operating activities: Net earnings (loss) $ (1,300,617) $ 798 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 258,550 218,568 Loss on sale and abandonment of assets 25,740 6,454 Deferred income taxes 200,000 -- Changes in assets and liabilities: Accounts receivable 484,674 (531,588) Inventories (450,386) 471,525 Prepaid expenses and other current assets 66,268 86,026 Income taxes payable -- (1,070,000) Accounts payable and accrued liabilities 224,011 (1,129,965) Deferred revenues 969,773 530,227 Advances on contracts in progress (726,254) (1,542,193) ------------ ------------ Net cash used in operating activities (248,245) (2,960,148) ------------ ------------ Cash flows from investing activities: Additions to property and equipment (135,180) (327,637) Increase in patent costs (68,428) (1,015) Other assets (1,400) (7,080) Proceeds from sale of equipment -- 80 ------------ ------------ Net cash used in investing activities (205,008) (335,652) ------------ ------------ Cash flows from financing activities: Net borrowings on short-term debt 325,000 -- Exercise of stock options 97,028 167,385 ------------ ------------ Net cash provided by financing activities 422,028 167,385 ------------ ------------ Net decrease in cash and cash equivalents (31,221) (3,128,415) Cash and cash equivalents, beginning of period 7,463,382 10,709,370 ------------ ------------ Cash and cash equivalents, end of period $ 7,432,161 $ 7,580,955 ============ ============ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 39,402 $ 5,369 ============ ============ Income taxes (benefit) $ (285,998) $ 1,070,000 ============ ============
See accompanying notes to condensed consolidated financial statements. 5 SPIRE CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2001 1. INTERIM FINANCIAL STATEMENTS. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position as of June 30, 2001 and the results of operations for the three and six months ended June 30, 2001 and 2000 and cash flows for the six months ended June 30, 2001 and 2000. The results of operations for the three and six months ended June 30, 2001 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2001. The accounting policies followed by the Company are set forth in Note 2 to the Company's consolidated financial statements in its annual report on Form 10-KSB for the year ended December 31, 2000. The financial statements, with the exception of the December 31, 2000 balance sheet, are unaudited and have not been examined by independent certified public accountants. 2. INVENTORIES. Inventories consist of the following: June 30, December 31, 2001 2000 ---------- ---------- Raw materials $ 826,950 $ 588,732 Work in process 1,245,300 1,951,842 Finished goods 1,336,976 418,266 ---------- ---------- $3,409,226 $2,958,840 ========== ========== 3. EARNINGS PER SHARE. The following table provides a reconciliation of the denominators of the basic and diluted earnings (loss) per share computations for the Company's reported earnings (loss):
Three Months Ended June 30, Six Months Ended June 30, ----------------------- ----------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Weighted average number of shares outstanding - basic 6,707,763 6,627,680 6,696,377 6,606,422 Add net additional common shares upon exercise of common stock options -- -- -- 161,108 --------- --------- --------- --------- Adjusted weighted average common shares outstanding - diluted 6,707,763 6,627,680 6,696,377 6,767,530 ========= ========= ========= =========
At June 30, 2001, 239,062 shares of common stock issuable under stock options were outstanding, but were not included in the calculation of diluted earnings per share because the Company incurred a net loss for the three and six months ended June 30 2001 and, therefore, the effect would be antidilutive. 6 4. OPERATING SEGMENTS AND RELATED INFORMATION. The following table presents certain operating division information in accordance with the provisions of SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information", which was adopted in 1998.
Solar Solar Biomedical Biophotonics Total Equipment Systems Division Division Company --------------- ---------------- --------------- ----------------- --------------- For the Three Months Ended June 30, 2001 - ---------------------------------------- Net sales and revenues $ 905,665 $ 936,520 $874,411 $ 247,703 $ 2,964,299 Earnings (loss) from operations (179,133) (349,480) (329,904) 21,396 (837,121) For the Three Months Ended June 30, 2000 - ---------------------------------------- Net sales and revenues $1,401,919 $ 37,746 $1,109,458 $ 609,991 $3,159,114 Earnings (loss) from operations (324,256) (198,544) (165,003) 98,278 (589,525) For the Six Months Ended June 30, 2001 - ---------------------------------------- Net sales and revenues $3,018,621 $956,263 $1,758,266 $451,019 $ 6,184,169 Earnings (loss) from operations (345,935) (560,780) (560,115) (53,716) (1,520,566) For the Six Months Ended June 30, 2000 - ---------------------------------------- Net sales and revenues $3,531,818 $264,055 $2,465,086 $1,429,775 $7,690,734 Earnings (loss) from operations (166,354) (225,629) (41,431) 191,606 (241,806)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SECTION AND OTHER PARTS OF THIS REPORT CONTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS AND TIMING DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED OR REFERRED TO IN THIS REPORT AND IN ITEM 6 OF THE ANNUAL REPORT OF FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2000. Overview. - -------- Spire develops, manufactures and markets highly-engineered solar electric module manufacturing equipment and systems and provides biomedical processing services. Spire is the world's leader in the design and manufacture of specialized equipment for the production of terrestrial photovoltaic modules from solar cells, with its equipment installed in 144 factories and in 42 countries. Spire's value-added biomedical processing services offer surface treatments to enhance the durability or the antimicrobial characteristics of orthopedic and other medical devices. Results of Operations. - --------------------- The following table sets forth certain items as a percentage of net sales and revenues for the periods presented:
Three Months Ended June 30, Six Months Ended June 30, ------------------------------------ ---------------------------------- 2001 2000 2001 2000 ---------------- ---------------- ---------------- -------------- Net sales and revenues 100% 100% 100% 100% Cost of sales and revenues 83 80 80 70 ---------------- ---------------- ---------------- -------------- Gross profit 17 20 20 30 Selling, general and administrative expenses 46 39 44 33 ---------------- ---------------- ---------------- -------------- Loss from operations (28) (19) (25) (3) Loss before income taxes (26) (15) (22) -- Income tax expense (benefit) 3 (6) 1 -- ---------------- ---------------- ---------------- -------------- Net earnings (loss) (24%) (8%) (21%) 0% ================ ================ ================ ==============
7 Three and Six Months Ended June 30, 2001 Compared to Three and Six Months Ended - ------------------------------------------------------------------------------- June 30, 2000. - -------------- NET SALES AND REVENUES Net sales and revenues decreased $195,000 or 6% for the three months ended June 30, 2001 to $2,964,000, compared to $3,159,000 for the three months ended June 30, 2000. Contract research, service and license revenues decreased $661,000 or 34% to $1,274,000 for the three months ended June 30, 2001 compared to $1,935,000 for 2000. Sales of goods increased $466,000 or 38% to $1,690,000 for 2001, compared to $1,224,000 for 2000. The following table categorizes the Company's net sales and revenues for the periods presented:
Three Months Ended June 30, ------------------------------------------------------------- 2001 2000 % Change ----------------- ----------------- ----------------- Contract research, service and license revenues $1,274,000 $1,935,000 (34%) Sales of goods 1,690,000 1,224,000 38% ----------------- ----------------- Net sales and revenues $2,964,000 $3,159,000 (6%) ================= =================
Net sales and revenues decreased $1,507,000 or 20% for the six months ended June 30, 2001 to $6,184,000, compared to $7,691,000 for the six months ended June 30, 2000. Contract research, service and license revenues decreased $787,000 or 18% to $3,525,000 for the six months ended June 30, 2001 compared to $4,312,000 for 2000. Sales of goods increased $280,000 or 8% to $3,659,000 for 2001, compared to $3,379,000 for 2000. The following table categorizes the Company's net sales and revenues for the periods presented:
Six Months Ended June 30, ------------------------------------------------------------- 2001 2000 % Change ----------------- ----------------- ----------------- Contract research, service and license revenues $2,525,000 $4,312,000 (18%) Sales of goods 3,659,000 3,379,000 8% ----------------- ----------------- Net sales and revenues $6,184,000 $7,691,000 (20%) ================= =================
The increase in sales of goods for the three and six month periods ended June 30, 2001 is primarily due to increased sales of systems in Chicago. The decline in contract research, service and license revenues for the three and six month periods ended June 30, 2001 is primarily due to the sale of the Optoelectronics business, as well as delays in performance by a subcontractor. COST OF SALES AND REVENUES The cost of contract research, service and license revenues decreased $714,000 to $1,047,000, and decreased to 82% of related revenues, for the three months ended June 30, 2001, compared to $1,761,000 or 91% of related revenues for the three months ended June 30, 2000. The decrease is due to a change in product mix, and lower volume. Cost of goods sold increased $632,000 to $1,401,000, and increased to 83% of related sales, for the three months ended June 30, 2001, compared to $769,000 or 63% of related sales, for the three months ended June 30, 2000. The increase in cost is due to higher volume, and the increase as a percentage of sales is due to product mix. The following table categorizes the Company's cost of sales and revenues for the periods presented, stated in dollars and as a percentage of related sales and revenues:
Three Months Ended June 30, -------------------------------------------------------------- 2001 % 2000 % ---------------- -------- ---------------- --------- Cost of contract research, service and license revenues $1,047,000 82% $1,761,000 91% Cost of goods sold 1,401,000 83% 769,000 63% ---------------- ---------------- Total cost of sales and revenues $2,448,000 83% $2,530,000 80% ================ ================
8 The cost of contract research, service and license revenues decreased $1,356,000 to $1,937,000, and decreased to 77% of related revenues, for the six months ended June 30, 2001, compared to $3,293,000 or 76% of related revenues for the six months ended June 30, 2000. The decrease as a percentage of sales is due to staff reductions. Cost of manufacturing equipment sales increased $937,000 to $3,020,000, and increased to 83% of related sales, for the six months ended June 30, 2001, compared to $2,083,000 or 62% of related sales, for the six months ended June 30, 2000. The increase in cost is due to higher volume, and the increase as a percentage of sales is due to product mix. The following table categorizes the Company's cost of sales and revenues for the periods presented, stated in dollars and as a percentage of related sales and revenues:
Six Months Ended June 30, -------------------------------------------------------------- 2001 % 2000 % ---------------- -------- ---------------- --------- Cost of contract research, service and license revenues $1,937,000 77% $3,293,000 76% Cost of goods sold 3,020,000 83% 2,083,000 62% ---------------- ---------------- Total cost of sales and revenues $4,957,000 80% $5,376,000 70% ================ ================
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the three months ended June 30, 2001 increased $135,000 to $1,353,000, and increased to 46% of sales and revenues, compared to $1,218,000 or 39% of sales and revenues for the three months ended June 30, 2000. The increase in selling, general and administrative expenses is due to accrued severance packages for terminated staff as part of a cost reduction implemented by the Company. Selling, general and administrative expenses for the six months ended June 30, 2001 increased $191,000 to $2,748,000, and increased to 44% of sales and revenues, compared to $2,557,000 or 33% of sales and revenues for the six months ended June 30, 2000. INTEREST The Company earned $80,000 of interest income for the quarter ended June 30, 2001, compared to $120,000 of interest income for the quarter ended June 30, 2000. The Company incurred interest expense of $20,000 for the quarter ended June 30, 2001 of which 2000 was capitalized, compared to $2,000 in the second quarter of 2000 of which none was capitalized. INCOME TAXES The Company recorded a tax benefit of $80,000 for the three months ended June 30, 2001, compared to a tax benefit of $206,000 for the quarter ended June 30, 2000. The Company recorded a tax benefit of $80,000 for the six months ended June 30, 2001 compared to no benefit for the six months ended June 30, 2000. The Company recorded no income tax expense for the six months ended June 30, 2001 and June 30, 2000. NET EARNINGS (LOSS) The Company reported a net loss for the quarter ended June 30, 2001 of $697,000, compared to a net loss of $266,000 for the quarter ended June 30, 2000. The Company reported a net loss of $1,301,000 for the six months ended June 30, 2001, compared to a net profit of $798 for the same period of 2000. Liquidity and Capital Resources. - ------------------------------- To date the Company has been able to fund its operating cash requirements using proceeds from sale of assets, operations and available lines of credit. On July 25, 2000, the Company entered into a revolving credit agreement with the Silicon Valley Bank, replacing its previous credit facility with the Bank. This agreement provides for a $2 million revolving credit facility, based upon eligible accounts receivable requirements. This line of credit has been established to provide the Company with resources for general working capital purposes and Standby Letter of Credit Guarantees for foreign customers. The line is secured by all assets of the Company. At June 30, 2001, interest on the line was at the Bank's prime 9 rate plus 1/2 percent (7.25%). The line contains covenants including provisions relating to profitability and net worth. The Company was in default of the covenants as of June 30, 2001. Borrowings on the line are classified as a current liability. As of June 30, 2001, the Company had $875,000 outstanding under this revolving credit facility. The Company is currently negotiating a renewal to this line. The Company believes it has sufficient resources to finance its current operations for the foreseeable future through working capital, its existing line of credit and available lease arrangements. Cash and cash equivalents increased $31,000 to $7,432,000 at June 30, 2001 from $7,463,000 at December 31, 2000. To date, there are no material commitments by the Company for capital expenditures. At June 30, 2001, the Company's retained earnings were $1,087,000, compared to retained earnings of $2,388,000 as of December 31, 2000. Working capital as of June 30, 2001 decreased 12% to $7,900,000, compared to $9,025,000 as of December 31, 2000. Recent Accounting Pronouncements. - -------------------------------- In January 2001, the EITF reached a consensus on Issue 00-22, ACCOUNTING FOR "POINTS" AND CERTAIN OTHER TIME-BASED OR VOLUME-BASED SALES INCENTIVE OFFERS, AND OFFERS FOR FREE PRODUCTS OR SERVICES TO BE DELIVERED IN THE FUTURE. Issue 00-22 will require that certain volume-based cash rebates to customers currently recognized as marketing costs be classified as a reduction of revenue. The consensus is effective for the first quarter of 2001 and was not material to our consolidated financial statements. Impact of Inflation and Changing Prices. - --------------------------------------- Historically, the Company's business has not been materially impacted by inflation. Manufacturing equipment sales are generally quoted, manufactured and shipped within a cycle of approximately six months, allowing for orderly pricing adjustments to the cost of labor and purchased parts. The Company has not experienced any negative effects from the impact of inflation on long-term contracts. The Company's service business is not expected to be seriously affected by inflation because its procurement-production cycle typically ranges from two weeks to several months, and prices generally are not fixed for more than one year. Research and development contracts usually include cost escalation provisions. Foreign Exchange Fluctuation. - ---------------------------- The Company sells only in U.S. dollars, generally against an irrevocable confirmed letter of credit through a major U.S. bank. Therefore the Company is not directly affected by foreign exchange fluctuations on its current orders. However, fluctuations in foreign exchange rates do have an effect on the Company's customers' access to U.S. dollars and on the pricing competition on certain pieces of equipment that the Company sells in selected markets. 10 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is subject, from time to time, to legal proceedings and claims arising out of its business, which cover a wide range of matters. Management, after review and consultation with counsel, considers that any liability from all of these legal proceedings and claims would not materially affect the consolidated financial position, results of operations or liquidity of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On June 6, 2001, the Company held a Special Meeting in Lieu of Annual Meeting of Stockholders to vote on the following proposal: To fix the number of directors at eight and to elect eight members of the Board of Directors. Nominees for Director were: (a) Michael T. Eckhart, (b) Udo Henseler, (c) David R. Lipinski, (d) Roger G. Little, (e) Guy L. Mayer, (f) Roger W. Redmond, (e) John A. Tarello, (f) Anthony J. Viscogliosi.
Shares Shares Voting Against Shares Abstaining Broker Proposal Voting For or Authority Withheld Non-Votes ---------------------------- ------------------ --------------------------- ------------------- ------------------ Michael T. Eckhart 5,665,091 199,922 0 821,311 Udo Henseler 5,665,091 199,922 0 821,311 David R. Lipinski 5,667,091 197,922 0 821,311 Roger G. Little 5,667,091 197,922 0 821,311 Guy L. Mayer 5,667,091 197,922 0 821,311 Roger W. Redmond 5,665,091 199,922 0 821,311 John A. Tarello 5,667,091 197,922 0 821,311 Anthony J. Viscogliosi 5,665,091 199,922 0 821,311
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits. -------- No exhibits are filed herewith. b. Reports of Form 8-K. ------------------- No reports on Form 8-K were filed by the Registrant in the quarter ended June 30, 2001. 11 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Spire Corporation 14 August 2001 By: /s/ Roger G. Little - ---------------------- -------------------------------------------- Date Roger G. Little President, Chief Executive Officer and Chairman of the Board 14 August 2001 By: /s/ Richard S. Gregorio - ---------------------- -------------------------------------------- Date Richard S. Gregorio Vice President and Chief Financial Officer, Treasurer, Clerk and Principal Accounting Officer 12 -----END PRIVACY-ENHANCED MESSAGE-----